Economics 2150A/B Lecture Notes - Lecture 17: Excise, Glossary Of Partner Dance Terms, Economic Rent
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ECON 2150A/B Full Course Notes
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Explicit costs involve a direct monetary outlay. Implicit costs do not involve outlays of cash. Economic costs sum of all decision-relevant explicit and implicit costs. Accounting costs appear on accounting statements explicit costs incurred in the past (historical) Sunk costs costs have already been incurred and therefore cannot be avoided, no matter what decision is made. Non-sunk costs (avoidable costs) costs that will be incurred only if particular decision is made (avoided if decision is not made) Problem of finding input combination that minimizes firm"s total cost of producing particular level of output. Long run decision firm faces a blank slate (no constraints: costs associated with long-run decision are necessarily non-sunk . Short run decision firm is subject to constraints; will not be able to adjust quantities of its inputs and/or reverse consequences of past decisions made regarding those inputs.